On Friday
morning, delegates convened in the Committee on Finance and Administration
(CFA), in the Committee on Reforestation and Forest Management (CRF) and in the
Committees on Forest Industry (CFI) and Economic Information and Market
Information (CEM) to adopt their respective reports. In the afternoon, delegates
convened in Council to discuss phased approaches to certification (PAs) and the
ITTO Fellowship Programme and to hear closing statements from observers.
Delegates also met in the Chair’s Open-Ended Drafting Group to discuss the draft
decision on improving the effectiveness and efficiency of the ITTO project
cycle.

CRF

On the review
and update of ITTO Guidelines for the Conservation of Biodiversity in Tropical
Timber Producing Forests, the US suggested having a draft set of guidelines and
a proposal on how to finalize them. BRAZIL agreed as long as consultation and
revision by an external expert panel are guaranteed. The US also requested a
breakdown of the guidelines’ budget.The REPUBLIC OF CONGO requested
three months to submit the completion, technical and financial audit reports for
its project on integrated management of the Ngoua II Forest. COLOMBIA requested
that Council not suspend its projects in Guaviare reserve and in Choco. The ITTO
Secretariat agreed as long as the new executing agency provides all
documentation to verify the projects’ status. Delegates adopted the report (CRF(XXXV)/9)
and elected Jennifer Conje (US) as Chair and Petrus Gunarso (Indonesia) as
Vice-Chair of the CRF for 2005.

CEM/CFI

Delegates
adopted the report of the CEM/CFI (CEM-CFI(XXXV)/8). On the terms of reference
(TOR) for the study on subsidies, the US, supported by SWITZERLAND and AUSTRIA,
requested that language adding “subsidies” to “range of support measures” and
substituting “international bodies” for “international agencies.” Delegates then
elected Renzo Siliva (Venezuela) as the CEM Chair and James Gasana (Switzerland)
as Vice-Chair for 2005. They then elected Celestine Ntsame-Okwo (Gabon) as CFI
Chair for 2005.

CFA

Delegates
addressed agenda items on the 2004-2005 Biennial Work Program, election of
officers and the dates and venue of the next sessions. Delegates approved the
report with minor amendments. Delegates then elected Shaharuddin Mohamad Ismail
(Malaysia) as CFA Chair and Sai Guohua (China) as CFA Vice-Chair for 2005.

COUNCIL SESSION

PHASED APPROACHES TO CERTIFICATION: Markku Simula,
ITTO consultant, presented the report on procedures for the implementation of
PAs in tropical timber producing countries (ITTC(XXXVII)/12), noting that
certification can offer access to specialized markets. Saying that the central
objective of the study was developing procedures for phased approaches to
certitication, he said the study recommended, inter alia: selection of
the three PAs – baseline, cumulative and predefined - be left to the individual
certification systems; flexibility in phasing of standard elements; further
clarification of legality as a baseline requirement; and further consultations
with buyers and other stakeholders.

Simula also
presented a report on financial cost-benefit analysis of forest certification
and implementation of PAs (ITTC(XXXVII)/13), indicating that without the
development of certification standards and systems, the progress in the tropics
will remain slow. He recommended that the ITTO could, inter alia: convene
a meeting on international and national forest certification schemes to discuss
modalities for and share experiences on PAs; promote the inclusion of PAs in
international criteria for credible and acceptable systems; and implement pilot
projects among small-scale forest management units and community forests for
forest certification. INDONESIA suggested disaggregating data on certified
timber from natural forests from other types of forests. MALAYSIA indicated that
the report would provide good input to its country-level consultation on
certification, noting the costliness of implementing certification in most
producer countries without financial assistance. SWITZERLAND announced an
international workshop on PAs to be held in Bern, Switzerland in April 2005.
GHANA suggested that the ITTO seek broader stakeholder consultations at the
country level, and supported the PAs to forest certification. The EC said PAs
help place the ITTO at the forefront of this policy issue, and raised concerns
over why African case studies were not included in the report. BRAZIL noted that
there are different ways that certification could establish legality and
suggested including greater stakeholder participation in the initial stages of
the certification process. The REPUBLIC OF CONGO said it hoped to implement a
pilot project in coordination with the ITTO to design PAs, which would be
appropriate to Africa in general.

REPORTS OF COMMITTEES: CEM Chair Yeo-Chang Youn
(Republic of Korea) introduced the report of the CEM/CFI (CEM/CFI(XXXV/8),
enumerating the projects and pre-projects that have been completed, evaluated
and funded. He catalogued the policy work on market access, certification,
market studies, the ITTO Annual Market Review, subsidies, capacity-building for
CITES, and tracking. The TORs on the studies on subsidies and tracking were
approved.

CFI Chair
Astrid Bergquist (Sweden) reported on project and pre-project work and on policy
activities, including an international conference on plywood in China and
proposals for future programs on rubberwood, bioenergy and reduced impact
logging.

CRF Chair
A.S.K. Boachie-Dapaah (Ghana) presented the CRF report (CRF(XXXV/9), giving
information on completed projects and pre-projects and ex-post
evaluations. He proposed that the list of projects for ex-post evaluation
should include all projects completed since 2002. He reported on policy
activities including conferences and the completion of TOR for the review of the
ITTO biodiversity guidelines.

CFA Chair
Chris Ellis (US) presented the CFA report (CFA(XVI)/6). He reported that
delegates approved the indicative Administrative Budget for 2005. He said that
the budget level would be maintained at the level approved in the 2004-05
Biennial Administrative Budget. He noted that the Committee authorized the
Executive Director to draw on the Working Capital Account not in excess of US
$600,000 to cover costs associated with the negotiation of the successor
agreement to the ITTA, 1994. He noted that members’ total arrearages amounted to
over US $4 million, and recognized the demands placed on members that have
difficulty meeting their assessed contributions. SWITZERLAND expressed concern
over the lack of time dedicated to addressing specific line items associated
with the allocation for the ITTA, 1994 renegotiations. Council adopted the
Committee reports without amendment.

ITTO
FELLOWSHIP PROGRAMME: The ITTO Secretariat described
the extent of the fellowship programme, noting that 244 recipients had received
US $1.3 million since the inception of the fellowship (ITTC(XXXVII)/14) & (ITTC(XXXVII)/15).
He said that 77 percent of the fellowships are in reforestation and forest
management and less than 17 percent in forest industry. Alhassan Attah (Ghana),
ITTC Vice Chair, said that the fellowship panel, which consists of three
producers - Ghana, the Philippines and Venezuela - and three consumer members -
the Netherlands, Switzerland and the US - has reviewed 113 applications and
approved 25 subject to a limit of US $150,400. He said that of those recipients
approved 32 percent are women, whereas five years ago 20 percent were women. He
then said that 40 percent of recipients were from the Asia-Pacific region, 20
percent from Africa, 24 percent from Latin America and 16 percent from consumer
countries.

OTHER
STATEMENTS: Kikojiro Katsuhisa, Food and Agriculture
Organization (FAO), emphasized the importance of creating more synergies between
the FAO and the ITTO, and said that the upcoming FAO Committee on Forestry and
preceding Ministerial meeting in March represent a good opportunity to create
such synergies. He also announced the upcoming FAO publication on the ‘State of
the World’s Forests.’

Mahendra
Joshi, United Nations Forum on Forests (UNFF), said that 2005 will be a critical
year for the UNFF, noting the upcoming Country-Led Initiative in Guadalajara,
Mexico and the upcoming UNFF-5 meeting in May and accompanying High-Level
Ministerial segment. He said the ministerial segment would discuss how, inter
alia, forest activities are helping to meet the Millennium Development
Goals, which will be reviewed at the next UN General Assembly.

Barney Chan,
Chair of the Trade Advisory Group (TAG), stated TAG's desire to strengthen TAG's
relationship with the Civil Society Advisory Group (CSAG). He said that the most
pressing problem to ensuring legal compliance is that many countriesï¿½ different
procurement rules are becoming disincentives to trade in tropical timber and may
undermine SFM efforts. He called for Council to consider how to resolve trade
data discrepancies, demonstrate that there are adequate processes to verify
legality in producer countries and carry out an audit of existing tracking
systems in tropical forest industries.

CHAIRï¿½S OPEN-ENDED DRAFTING GROUP

In the evening
the Chairï¿½s drafting group met to continue work on the draft decision to improve
and strengthen the ITTO project cycle. The US reported on results of a small
working group, which met in the afternoon to discuss proposed draft annexes to
the decision. The output of the working group was a table summarizing
recommendations on remedial measures for specific problems and implications
identified in each phase of the project cycle, along with identification of the
parties responsible for carrying out those measures. MALAYSIA noted that
specific remedial measures identified in the annexes should correlate to the
operative paragraphs of the decision.

Delegates
agreed to a paragraph calling for training workshops/capacity building focused
on the national level.

Delegates
modified a paragraph establishing a database of experts to assist with project
proposals to read that nominations for experts could be made by international
organizations as well as governments. They also agreed that two consultants
should be hired to develop a methodology for assessing proposals, using
qualitative award criteria and weighted scores, and that the twenty-ninth Expert
Panel for Technical Appraisal of Pre-Project and Project Proposals be extended
by two days in order to update the Panelï¿½s TOR accordingly.

On improvement
of project cycle management tools and manuals, the group agreed on language
requesting the Executive Director to: develop draft TOR for consultants who
would be engaged to revise the ITTO Project Formulation Manual and related
material; engage two consultants to implement those TOR, following approval by
the Joint Committee, and present results of their work to Council for its
consideration; and, subsequently, engage an expert for preparation of
computerized tools to facilitate project proposal and budget preparation via the
ITTO website.

Regarding the
expansion of the role of ITTO Secretariat on the project cycle, countries agreed
to language requesting the Executive Director to engage the Secretariat staff
actively in the various phases of the project cycle and to implement, as
appropriate, recommendations listed in an annex to the decision. The annex
discusses recommendations for project: identification; formulation; appraisal;
decision/funding; implementation; mid-term, terminal, and ex-post
evaluations; and completion.

On actions to
be taken by members submitting project proposals, producers and consumers were
deadlocked on language pertaining to the number of projects that could be
submitted per Council session. MALAYSIA and BRAZIL suggested that submitting
countries should not be limited in the number of projects they submit, but that
projects could be ranked in order of priority by member countries. The US said
that a previous Council decision had been taken to limit the number of projects
submitted to increase the project cycleï¿½s effectiveness. BRAZIL proposed to add
language allowing the Expert Panel to give priority to the proposals identified
by Producer countries as priority projects.

On finance,
the NETHERLANDS proposed an additional paragraph calling for review after two
years the extent to which the decision on project effectiveness has resulted in
improvements to the project cycle. As of 9 pm no agreement had been reached on
this draft decision.

IN
THE CORRIDORS

As drafting of
the decision on improving the project cycle got underway, some delegates were
hopeful that the proposed decision would not only render ITTOï¿½s project cycle
more effective but, more important, help attract more financing to the ITTO. To
this end, one consumer member said that modernizing ITTOï¿½s project cycle could
greatly improve ITTOï¿½s standing within the international community and make it
more attractive vis-ï¿½-vis other organizations. Other delegates, however, were
less optimistic about reaching an agreement at this session on approving project
cycle effectiveness and suggested that the decision may well be postponed until
ITTC-39.

This issue of
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